H3O Pink is the formula to remember if you are looking for a commercial way to express love on Mother's Day on Sunday. It is the name given by hi-tech breeders to one of the roses being imported by the million this week from Kenya's leading flower company, Flamingo Homegrown, as shops such as M&S gear up for a peak in sales.

Flamingo's warm pink rose, marketed as symbolising a gentler love than the red-blooded passion of crimson Valentine's blooms, will be M&S's top seller this weekend. The hint of water in the H3O name is apposite too, as most of Britain's flowers are imported by air from water-scarce countries in Africa. Flamingo's farms and those of the other large flower multinationals are concentrated around one of the few freshwater lakes in Kenya, Lake Naivasha. As climate change threatens more frequent droughts, and with population growth adding to pressure on resources, the water footprint of this kind of trade is again under scrutiny.

Flowers are one of Kenya's main sources of foreign currency earnings, bringing in more than £300m a year to the economy, but questions are also being asked about how much of that money stays in Kenya.

The head of the Kenya Revenue Authority, John Njiraini, has announced that he is investigating the flower sector, including the three largest multinational exporters, because he suspects they are shifting profits to other jurisdictions and not paying their fair share of tax in Kenya.

Flying out of Nairobi as you pass over the huge geological fault line of the Great Rift Valley, its floor opens out in front of you with Lake Naivasha gleaming like a sheet of glass below. Originally Masai grazing land, this was one of the first areas settled by white farmers. Today huge stretches of white plastic reflect back the equatorial light. These are the greenhouses of the intensive farms.

In 2009 the industry had a wake-up call. The lake, on which the flower farms depend for irrigation, shrank dramatically after a prolonged drought, putting the whole business under threat. A flash storm then washed untreated sewage from Naivasha town and, it is suspected, chemical residues from some of the farms into the lake, killing large numbers of fish. The population of the town has grown from about 6,000 people in the early 1980s to approximately 240,000, according to its mayor, Paul Karanja, largely thanks to an influx of migrants drawn to the farms for work. Its infrastructure has not been able to keep up. On top of the sewage problems, the schools are struggling to cope with classes of up to 80 children, and patients in the hospital sometimes have to share beds, he told us.

The crisis has, however, accelerated efforts to make the area more sustainable. Big companies such as Flamingo have invested millions of pounds to minimise their water use and maximise recycling and rainwater harvesting. Flamingo's general manager, Craig Oulton, told us it had cut its water use in half in 10 years by completely rethinking its growing practices. But perhaps more significant is that businesses such as Flamingo now acknowledge that cutting their own water use is not enough if they do not help with the wider needs around them. Flamingo's head of sustainable business, Richard Fox, told us: "In the last two years the water dropped to levels not seen since the 1940s. We've had to take our programmes outside our gates. Social equity now has to be part of the equation if we want our business to survive."

Horticultural companies agreed last year to pay a new tax to the town, based on acreage, to tackle infrastructure problems. Regulation of water use has been weak, so Marks & Spencer has put up funding to help develop a democratic system of negotiating how all the groups that depend on the lake will share its water and cut back in times of drought. These include Masai pastoralists, smallholders, fishermen and hotels as well as big horticulture firms.

Louise Nicholls, M&S's head of sustainable sourcing, said: "As climate change impacts we will have to make some difficult choices about where we source food and flowers, especially if it's a water-vulnerable country. If you want a mandate to supply from a particular country, it will be very important to show the wider benefit of your trade there."

The bad publicity in 2003 has driven other changes too. Roses are a luxury feel-good purchase. If consumers feel bad about how they are produced, they may not want to buy, so companies have had to respond to criticism. All Flamingo flowers are produced to Fairtrade standards.

The company has also slashed its pesticide use. The most toxic class-1 chemicals are no longer used, and most pests are treated with biological controls instead, including the deployment of ladybirds and other predators cultivated in specially built bug-harvesting greenhouses.

Labour conditions on Flamingo's farms have also improved, as workers we interviewed independently away from the farms confirmed. Overtime is voluntary, casual contracts have mostly been replaced with permanent ones and a real effort has been made to train and promote women supervisors and eliminate harassment. Gender and welfare committees deal with any problems swiftly.

The agricultural workers union, which has not yet won recognition at the company, would like to see a greater distribution of profits in the form of higher wages, but wages and benefits are at least above average. Most of the workers from other big firms we interviewed said they were glad to have the jobs but it was a struggle to survive on £50 to £60 pay a month.

Rachel English is co-ordinator for Women Working Worldwide, which blew the whistle on conditions. She said: "They've made progress on labour rights, but ... are the workers earning a living wage? What's fair? The big farms may pay more, but it's nothing like enough to live on decently. That's the next challenge."

Flower trends

The best-selling roses are white and yellow, but the fashion for vintage clothing has filtered through to the flower market, with washed-out tones of pale pink, oatmeal and even soft brown gaining popularity.

Bouquet trends, meanwhile, are shifting from the clash of bold colours of recent years to a more subtle mix of shades and tones of the same colour.

Plant breeding over the years has concentrated on producing the perfect shape, colour, stem length and shelf life for cut roses, with the result that scent has faded.

Breeders have been working to bring back the rose's distinctive fragrance, crossing old English varieties with newer ones. However, the unconventional, slightly serrated petals this produces have not proved popular with the public.